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TMI Blog2014 (5) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... ociety filed its return of income for A.Y. 03-04 on 31.10.2003 declaring total income at Rs. Nil after setting off of brought forward losses and depreciation. The case was selected for scrutiny and thereafter the assessment was framed under section 143(3) vide order dated 28th March 2006 and the total income was determined at Rs. 1,55,94,949/- before adjustment of unabsorbed depreciation. Subsequently, A.O. noticed that though he had made disallowance of 15% out of administrative and welfare expenses, the amount of the disallowance was wrongly calculated at Rs. 73,064/- instead of Rs. 7,30,641/- which according to him, was an apparent mistake on record and he therefore vide order dated 28.04.2009 passed under section 154 of the Act made fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal order, because the appellant did not point out that there was a discrepancy of this type in the assessment order. The CIT appeal has not considered this issue as to whether the disallowance mentioned at 15% is arithmetically commensurate with the figure of 73064 or not. This was not pointed out by the appellant and this has not been considered by the CIT(A). Hence, even on facts there is no merger of assessment order with the CIT(A) order as the CIT(A) has not considered this particular issue in this particular manner. It is not understandable as to why a patent mistake should not be corrected. The correct legal remedies for the appellant was that this issue should have been raised at the time of CIT appeal proceeding. In any case, thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... impugned order. This action of the lower authorities is in clear breach of law and Principles of Natural Justice and therefore deserves to be quashed. 5. Before us, the ld. A.R. submitted that though the Assessee has raised various grounds, the only effective ground is with respect to wrongly invoking the provisions of Section 154 of the Act. The ld. A.R. submitted that while computing the total income, the Assessee had suo motu disallowed Rs. 50,000/- out of the sundry expenses which the A.O considered to be on lower side and he therefore proposed further disallowance. The ld. A.R. further submitted that though the A.O on page 18 of para 7.3 had stated the disallowance at 15% but in the same para he worked out the disallowance of Rs. 73, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rial on record. It is an undisputed fact that while computing the total income, the Assessee out of the total sundry expenses had suo motu disallowed the expenses of Rs. 50,000/- on adhoc basis considering the possibility of expenses being incurred without proper supporting. Against the disallowance of Rs. 50,000/- made by the Assessee, A.O. was of the view that the disallowance worked by the Assessee to be on lower side and therefore made a further disallowance of Rs. 23,064/- by holding as under:- 7.3 The explanation furnished by the assessee is considered. While deciding the quantum of disallowance out of staff welfare and other office expenses, the nature of the business and hazardous work being carried out by the staff members has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmitted by the A.R. that the said expenditure are wholly and exclusively incurred by the appellant for its business is called for. 6.1 The submission of the A.R. of the appellant have been perused. Having verified the facts and circumstances of the case, I am of the view that when the appellant itself has disallowed the sum of Rs. 50,000/- out of sundry expenses, further disallowance of Rs. 23,064/- is not warranted. Therefore, the A.O is directed to delete the addition made by him at Rs. 23,064/-. Thus this ground of appeal is allowed. 9. From the copy of the assessment order, it is seen that the addition of Rs. 23,064/- was mentioned at 3 different places in the assessment order. Against the order of A.O, Assessee carried the matter bef ..... X X X X Extracts X X X X X X X X Extracts X X X X
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